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Might AIG Escape Prosecution for (Allegedly) Cooking the Books?
It is pretty clear that officials and the likes of Tim Geithner were directly involved in editing documents that would eventually become public disclosures by AIG in the form of SEC filings. To the extent these filings were knowing material omissions or misstatements of fact Tim, along with executives at AIG, should be heading to jail, right? Well, not necessarily. As we wrote two months ago, there is at least one little hitch that permits firms to cook the books and skate off after the fact. Enter 15 USC 2B § 78m(b)(3)(A):
With respect to matters concerning the national security of the United States, no duty or liability under paragraph (2) of this subsection shall be imposed upon any person acting in cooperation with the head of any Federal department or agency responsible for such matters if such act in cooperation with such head of a department or agency was done upon the specific, written directive of the head of such department or agency pursuant to Presidential authority to issue such directives. Each directive issued under this paragraph shall set forth the specific facts and circumstances with respect to which the provisions of this paragraph are to be invoked. Each such directive shall, unless renewed in writing, expire one year after the date of issuance. (Emphasis added).
We thought we were just being paranoid when we wondered in print if this provision had been used. That's not looking so paranoid anymore. We wonder, did the President grant such authority?
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HOw's that hope and change working for ya?
Poorly, too bad the world is all filled up, no "new world" to move to this time in order to flee the corrupted nation...
i don't even care anymore...everything is rigged right now
Eff it, let's go bowling.
Ever watch Lets Bowl on Comedy Central? Bowling Grudge matches with silly prizes should solve every thing.
am more concerned right now with the swine flu conspiracy...this is where governments and pharmaceutical companies want to have total control of us...make them fearful and sell them the vaccine...and guess who pays...the taxpayer...now that is wealth transfer...
Swine Flu is simply a $40 Billion welfare check from you the tax payer to the Pharma industry for a vaccine no one needed.
Nothing to see here. There is no unemployment. Everything is fine. Go shop. Buy a house. We have a tax credit for you. Soon you can buy a new washer with "cash for ____." Just fill in the blank.
It's all good...
It's official: We are now a Banana Republic.
The US has been a banana republic for quite a long time. The only difference with other banana republics is that the US managed to convince its own population and the rest of the world that it is all the opposite of the banana republic. Whether a final crash happens depends upon whether the US starts taking corrective action NOW, which seems... impossible. When the final crash occures depends upon when enough people realize the US is a banana republic / start acting upon that realization. The US is to become Argentina 2.0.
No, the only difference is that...
Yes! We Have No Bananas.
AIG along with Timmy G. Will escape any kind prosecution. Any fucking idiot knows that. That's because the whole Judicial system including Federal judges are property of Wall Street.
but does the bold actually apply to the FED? is it considered to be a federal department or agency??
The answer to that is a big N-O.
I'm sure, however, that the silence from the whores in congress will be deafening.
"Change we can believe in", according to Obama.
Nothing has changed as the government remains corrupt and is completely indifferent to its citizens and clearly could give a rip about future generations.
Believe in this, there is civil unrest brewing in this country and it time for all of you to go. Simply contact Chris Dodd as I doubt he shared all the reasons he is quitting so use a few of his leftovers.
Enough is enough!!
He's so transparent.
That stuff about democracy, rule of law and free and open markets was just talk.
"Change we can believe in", according to Obama. (Zero Hedge) 1/7/10
Nothing has changed as the government remains corrupt and is completely indifferent to its citizens and clearly could give a rip about future generations.
Believe in this, there is civil unrest brewing in this country and it time for all of you to go. Simply contact Chris Dodd as I doubt he shared all the reasons he is quitting so use a few of his leftovers.
Enough is enough!!
Yes, sir, Tim Geithner will never go to jail. Sovereign immunity, delegated.
That's all you need to know if you're a financial-company executive that's looking for a shield.
Looks like the Supreme Court is going to have to rule on the definition of national security.
From previous post about Giethner:
The whole part discussing this in the December 24, 2008 SEC filing was eliminated under Geithner's instructions:
From 15 USC 2B § 78m(b)(3)(A):
head of any Federal department or agency responsible for such matters
TTT wasn't sworn in as Treasury secretary until Jan 26, 2009. Unless one could count the New York Fed as a governemntal agency described in the 15 USC 2B § 78m(b)(3)(A):
It seems like he wouldn't be able to be covered by the above law until after he was sworn in. Or maybe I've smoked to much crack this morning.
Frankly, I'm thinking smoking more is in order these days.
Pedantic questions:
1) Is the Federal Reserve Bank a federal department or agency, within the meaning of this law?
2) Is the FRB of New York a separate federal department or agency (separate from the overall FRB), within the meaning of this law, such that its head (Geithner at the time) would be deemed to be an agency head thus potentially fitting within this exception?
3) Accordingly, can Geithner based on his position at the time be treated as a head of a federal department or agency? (And not merely a deputy or senior officer other than the head, which would seem correct if you consider the entire FRB system to be one federal department or agency.)
4) Is the FRB of NY an entity "responsible for such matters" with respect to the potential noncompliance with the securities laws? Does a FRB have any jurisdiction over securities laws, particularly when involving an entity that is not a bank?
There's nothing "federal" about the federal reserve. It's a private company owned by the member banks.
Yeah, I know that argument, and mostly agree with it. But it does have a sort of federal government sponsorship. My questions were phrased carefully. Hopefully some other lawyer-types will chime in their responses.
Pls do not ask "stupid questions". FRBNY is no more federal agency as Federal Express. It is a quote btw of one prominent banker. Federal department is e.g. Treasury Department, Labor dpt. and so on, i.e. by definiton departments of the government, executive. Federal agency is also strictly defined, you have CIA, FBI, FHA and all the universe of three letters acronyms. Fullstop. All discussion of FRBNY as governmental or federal agency is ridiculous, but - considering latest performance of Big Heli-Ben - can be debated on Cramer TV-show for economic idiots.
The Forgotten (middle class) Man (& Woman) is delving away in patient industry, supporting his family, paying his taxes (and will be paying a lot more in taxes 2010 onwards), (conscientiously contributing to his 401k), casting his vote, supporting the church and the school, reading his newspaper, and cheering for the politician of his admiration, but he is the only one for whom there is no provision in the great scramble and the big divide.
- William Sumner quote prefacing Anatomy of a Bubble
written in 1930s starting with Great Depression !!
Sounds uncannily similar to 2009/10 !!
Magic phrase, use this as a pretext and you can get away with just about everything.
Boris speaks truth. "National Security" means never having to say you are sorry for everything from torture to the theft of any public asset, any fraud any anything...
IF you are the ruling class.
Bah - maybe the pres. will retroactively sign a doc stating he gave TG the go ahead to force AIG not to comply.
Still - that bails AIG's execs out - TG never did anything technically illegal here right? Gave bad orders, but AIG's execs can still do as they please...
If a note from the White House stating AIG is exempt from prosecution due to national security comes up - who will believe the date stamp on it?
What can one say?
Will Turbotax calculate the deductions Tiny Tim can take for
for the legion of bodyguards he will need?
I used the national security line to get out of putting out the garbage 2 days ago. It cuts back on the pickup people's overtime.
From the post above:
"...acting in cooperation with the head of any Federal department or agency responsible for such matters if such act in cooperation with such head of a department or agency was done..."
The NY Fed is not a Federal Department or Agency. It is a private corporation owned by member banks with officers appointed by the POTUS and approved by Congress (if memory serves me correctly.)
Any attempt to bring down the Financial terrorists is nothing but a Broadway play for the average American to watch and fall for.
Just to clarify: wouldn't the President in question be Bush?
I know there's no theoretical difference between the two parties, but it would be important to get it right on the indictment, yes?
Yes, if you have basic reading comprehension skills and can look up simple dates, maybe even do some basic arithmetic, then yes, Bush would the president who might (theoretically) have authorized the apparent lawbreaking.
Seems time reveals that most things called "conspiracy theories" presently end up being revealed later as truth. It just takes time. If we have any time left............
http://www.blacklistednews.com/news-6930-0-5-5--.html
"33 Conspiracy Theories That Turned Out To Be True, What Every Person Should Know…" I thought this was a good summary.
Cold comfort in the fact that the internet allows news to travel more quickly than ever. In the past you just had to shut up the mainstream media. Ah the good old days!
Please keep up the great work and most importantly keep the faith.
What has become of the American nation? Conceived with the vision of liberty and justice for all, we have descended in the clutches of corporate and other special interests to a second world state defined by K Street instead of Independence Square. A “ballot box” pox on all their houses – Senators, Representatives and Presidents alike.
This should let Ken Lewis off the hook as well
I sure hope so! I mean, I really miss his piggy face already...
"Might"... what do you mean, "might"?
This is no longer your father's or grandfather's country. Those ideas and principles no longer apply. Quit looking at stuff like this and pay attentions to Obama's really heroic stand on airplane terrorism like a good little girl... like you are supposed to.
My favorite part is when they put in ED LIDDY of Goldman Sachs as AIG CEO to oversee the fraud and make sure it got done right.
Strategic planning at its best.
It's all-out economic civil war!!
none
I foresee house-arrest
in The Hamptons, Palm Beach, Palm Springs, etc.
CNBC cares more about a 152" TV that no one can afford than this travesty
The Forgotten (middle class) Man (& Woman) is delving away in patient industry, supporting his family, paying his taxes (and will be paying a lot more in taxes 2010 onwards), (conscientiously contributing to his 401k), casting his vote, supporting the church and the school, reading his newspaper, and cheering for the politician of his admiration, but he is the only one for whom there is no provision in the great scramble and the big divide.
- William Sumner quote prefacing Anatomy of a Bubble
written in 1930s starting with Great Depression !!
Sounds uncannily similar to 2009/10 !!
I once had a Vietnam era vet tell me that if he was ever to go into battle again, his weapon of choice would be the Ruger Mini-14 in .223. Claimed it was "a flawlessly operating tool, that does what it is intended to do when needed." I have to agree with him, it is a nice weapon, but Remington also has a new semi-auto 'varmint rifle' out that looks like something used by Delta Force in Black Hawk Down. Any itenerant coyotes would best stay out of the neighborhood if I were armed with that. Decisions, decisions; how to spend that tax IOU coming later this year.....
Wondering if the NY Fed gave the hush hush orders to the counterparties as well???
If you are looking for 'change' you can believe in. I think we need to turn our eyes to this fellow:
www.lukesidewalker.com
He has a simple philosophy, but one that should resonate with the majority of present day Americans, Elites excluded.
Icing on the cake...we all knew it though
Silly me, I thought "National Security" actually meant preserving the nation. You know, by protecting this whole "We The People" thing.
Now I realize that "National Security" just means protecting the entrenched power structure of the nation. It's not "National Security" anymore -- it is "Political Security."
So now the national security of the country becomes the protection of asset values for the select few...and when any laws are violated in the process you can invoke a presidential immunity from such laws.
And we criticize Russia and China? They should all die in their sleep....from the weight of their misdeeds.
I sent Zero Hedge that tidbit of national security last year! If it is in the national interests, a bank can cook its books as much as it likes. This must be why FAZ is getting hammered today.
The question is will anyone push it and make Obama own it? Will they force the release of the authority granted by him to Geithner? I doubt very seriously whether the congress or justice will do it so who wil?
Indict them on RICO suave charges baby!
http://funy1.blogspot.com/2010/01/can-you-spell-r-i-c-o-by-any-other-nam...
Disclosure: Long 3/4" Manila hemp rope
Gee, no wonder AIG got such large bonuses. It was "hush" money.......
We wonder, did the President grant such authority?
The question should be how many Presidents have issued Executive Order/s and/or directives concerning the financial sector of various enterprises and when to include oral or written delegation of this authority to others under 15 USC 2B § 78m(b)(3)(A) or its predecessors? When? How? Who? And the prevailing circumstances in reference to long term strategic national interests. This answers should be divided by those that are effected by various Defense Department R & D activities and all others, by each individual instance....
After all, this is a matter that has materially effected our nation and its markets for more than a generation of Presidents of the United States and their decisions. This is one area that any President cannot say it was someone else's doing since they are all office holders and are constrained by the actions and omissions of previous holders of that office. (The; "President of the US, Barack Obama" vs "Barack Obama, President of the US" paradigm)
What is notable is how various Presidents have attempted to deal with this. Obama just says it is all Bush's fault. Bush says he lost the records. Clinton has copies of everything at Little Rock.. that pertains to their political peers and business shavings. Bush, the Walker one had Jim Baker and Brent Scowcroft handle much of it. Reagan's must take up a whole National Archive warehouse. Carter's efforts were either handled by Zbigniew Brzezinski or left partially buried in the files of the various departments. Nixon shredded all of his records, or so he thought. Johnson's records management provided the foundation for Bush II.
Miles, the first paragraph of your response raises the best questions offered thus far through this thread. For shits and giggles, I tried to research the section myself, but ultimately have no idea how to go about it. My lawyer/good friend is going to have his intern pull the Congressional Minutes regarding this section, so as to at least decipher the circumstances and implied interpretation from when it was originally crafted and voted upon.
In the end, I suppose the results won't mean much, as government will do as government wants. However, I always enjoy pointing out hypocrisy when it's so blatantly present.
On another note, any new thoughts on Black Gives Way to Blue?
http://thomas.loc.gov/
Sometimes the hardest thing to do is to drive on. Even in a world dominated by those that would do it Again, even when all that is left for them is franchise value and for others another Love Hate Love realization.
No where is it stated that having granted such authority, he has to declare it to the people, or even keep record of such. America is screwed by its own laws and continue to sleep blissfully in the name of national "screw-curity", no wonder this funny nation grants authroty to bearded professors the right to prints funny money .
The AIG situation was an obvious scam from day one in Sept 2008...and we the people are screwed by the bankster crooks that run our government....we need to fire the senators that work for the privately held federal reserve.
According to Treasury, Timmy wasn't involved anymore by that time:
"Geithner was "officially recused from matters dealing with specific companies" at the New York Fed after his nomination to be Treasury secretary on Nov. 24, 2008, and "began to insulate himself weeks earlier in anticipation of his nomination," said Meg Reilly, a Treasury spokeswoman."
Link: http://www.washingtonpost.com/wp-dyn/content/article/2010/01/07/AR2010010703950.html